Kenya

Kenya has been covered widely in economic news over the last decade, from the first large-scale application of mobile money to a vibrant technology hub in Africa. Indeed, Kenya experienced robust economic growth from 2005-06 to 2015-16, growing at an average annual rate of 5.3%, higher than the average in Sub-Saharan Africa. This growth translated into gains in the fight to reduce poverty, with about 4.5 million Kenyans escaping poverty. Poverty measured under the national poverty line declined from 46.8% to 36.1% of the population. However, a closer look shows that not every segment of the population benefited from this impressive growth.

In the Africa Chief Economist’s Office, we seek to generate knowledge on key development issues around the continent. We also host the Gender Innovation Lab, which – as the name suggests – specifically generates evidence on how to close the gender gap in Africa. Over the course of 2018, we’ve produced a range of products (regional reports and updates), but we also produce academic articles and book chapters seeking to answer key, specific development questions.

The challenges faced by small farmers are similar across the developing world – pests, diseases and climate change. Yet in Africa the challenges are even greater. If farmers are to survive at current rates (let alone grow), they need to have access to high-yielding seeds, effective fertilizers and irrigation technologies. These issues threaten the region’s ability to feed itself and make business-growth and export markets especially difficult to reach. Other factors include the rise in global food prices and export subsidies for exporters in the developed economies, which leave African farmers struggling to price competitively.

Earlier this week we released the 14th edition of the Kenya Economic Update, our bi-annually published report which assesses the state of Kenya’s economy. Kenya remains one of the bright spots in the region. With economic growth rates sustained at above 5%, Kenya has outperformed the Sub-Sahara Africa regional average for eight consecutive years. Our macroeconomic team projects that gross domestic product (GDP) growth in Kenya will increase to 5.9% in 2016 and could accelerate to 6.1% by 2018. Both Kenya’s current performance and the positive medium-term outlook are in sharp contrast to the regional growth deceleration—average per capita incomes in the Sub-Saharan Africa will decline —and the global economic slowdown.

In recent years, China’s presence in sub-Saharan Africa has risen rapidly. Many fear that China spells doom for the Kenyan economy. Producers of manufactured goods, for example, face more competition from China in both foreign and domestic markets. Others argue that China will exploit Kenya’s resources and leave it unable to industrialize. If the manufacturing sector fails to take off, it will be harder to move people out of poverty.

Back in 2012, the news of Kenya’s oil discovery spread fast. Stock markets roared, politicians gushed and the Twitterati tweeted. Fast forward to today: with $70 off oil prices and at least another four to five years to go until the first commercial production, one cannot help but ask, has Kenyan oil been overrated?

With a tip of the hat to Clint Eastwood, the prospects for Kenya’s oil wealth can be characterised as the Good, the Bad and the Ugly.

At the same time, the vast majority of governments invest large sums in training programs, whether business training for entrepreneurs or vocational training for youth, with the goal of helping to increase incomes and opportunities.

Much of the media coverage of children during West Africa’s Ebola epidemic has been focused on orphans. Repeatedly, we have read heartbreakingstories of children who have lost parents to the disease and even been rejected by their communities. These children deserve our attention: We know that losing a parent has both short-term and long-term impacts. Evidence from Kenya, South Africa, Tanzania, and across Africa demonstrates significant reductions in educational outcomes for orphans in the short run. Evidence from Tanzania shows that adverse education and health effects persist into adulthood.